Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Edwards Lifesciences Corp., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Profitability metrics for the period between 2017 and 2021 demonstrate a non-linear growth trajectory characterized by intermittent contractions and a significant terminal expansion in 2021.
- EBITDA Trend Analysis
- Earnings before interest, tax, depreciation and amortization exhibited volatility, starting at US$ 1,140,000 thousand in 2017 and decreasing to US$ 868,700 thousand in 2018. A recovery followed in 2019 with a rise to US$ 1,276,500 thousand, before another decline to US$ 1,039,700 thousand in 2020. The period concluded with a substantial increase in 2021, reaching US$ 1,855,200 thousand, representing a significant recovery and growth peak.
- Net Income and Bottom-Line Performance
- Net income showed a more consistent upward trend from 2017 to 2019, growing from US$ 583,600 thousand to US$ 1,046,900 thousand. Similar to EBITDA, net income experienced a contraction in 2020 to US$ 823,400 thousand before surging to US$ 1,503,100 thousand in 2021. The alignment between the peaks and troughs of net income and EBITDA suggests that the primary drivers of profitability were operational rather than financial or tax-related.
- Operational Expense Analysis (D&A)
- The spread between EBITDA and EBIT indicates a steady increase in depreciation and amortization expenses. This difference grew from US$ 81,900 thousand in 2017 to US$ 134,800 thousand in 2021, suggesting an expansion of the company's asset base or increased capital expenditure over the analyzed period.
- Earnings Before Tax (EBT) and EBIT Correlation
- EBIT and EBT values remained closely aligned throughout the period, indicating minimal impact from interest expenses. The fluctuations in these figures mirrored the EBITDA trend, confirming that the operational volatility observed in 2018 and 2020 permeated all levels of the earnings statement.
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Enterprise Value to EBITDA Ratio, Current
Edwards Lifesciences Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 66,267,039) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 1,855,200) |
| Valuation Ratio | |
| EV/EBITDA | 35.72 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Abbott Laboratories | 14.90 |
| Elevance Health Inc. | 8.49 |
| Intuitive Surgical Inc. | 34.43 |
| Medtronic PLC | 13.53 |
| UnitedHealth Group Inc. | 17.10 |
| EV/EBITDA, Sector | |
| Health Care Equipment & Services | 14.99 |
| EV/EBITDA, Industry | |
| Health Care | 20.39 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Edwards Lifesciences Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 66,267,037) | 53,931,479) | 47,290,710) | 36,573,998) | 27,806,373) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 1,855,200) | 1,039,700) | 1,276,500) | 868,700) | 1,140,000) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 35.72 | 51.87 | 37.05 | 42.10 | 24.39 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Abbott Laboratories | 17.42 | — | — | — | — | |
| Elevance Health Inc. | 10.05 | — | — | — | — | |
| Intuitive Surgical Inc. | 44.10 | — | — | — | — | |
| Medtronic PLC | 24.41 | — | — | — | — | |
| UnitedHealth Group Inc. | 17.39 | — | — | — | — | |
| EV/EBITDA, Sector | ||||||
| Health Care Equipment & Services | 18.05 | — | — | — | — | |
| EV/EBITDA, Industry | ||||||
| Health Care | 14.33 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
3 2021 Calculation
EV/EBITDA = EV ÷ EBITDA
= 66,267,037 ÷ 1,855,200 = 35.72
4 Click competitor name to see calculations.
Between 2017 and 2021, a significant divergence is observed between the steady growth of enterprise value and the volatility of earnings before interest, tax, depreciation, and amortization (EBITDA), leading to substantial fluctuations in the valuation multiple.
- Enterprise Value Trajectory
- A consistent upward trend is evident in the enterprise value, which rose from $27.8 billion in 2017 to $66.3 billion in 2021. This represents a continuous expansion in the total market valuation of the entity over the five-year period.
- EBITDA Volatility
- Operational earnings exhibited instability, characterized by a decline in 2018 and another dip in 2020. However, a substantial recovery occurred in 2021, with EBITDA reaching its peak at $1.86 billion, indicating a strong rebound in cash flow generation at the end of the period.
- EV/EBITDA Ratio Dynamics
- The EV/EBITDA ratio experienced high volatility, shifting from 24.39 in 2017 to a peak of 51.87 in 2020. The surge in the ratio during 2020 is attributable to the combination of a rising enterprise value and a simultaneous contraction in EBITDA. By 2021, the ratio compressed to 35.72, driven by the significant increase in EBITDA which outpaced the growth in enterprise value for that specific year.
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